Oct 28, 2020

Why going paperless was a timely solution

TAG Development took CWB's advice to switch to electronic cheque deposits. She hasn’t looked back since.

When pandemic emergency restrictions first went into effect in March, Miha Faryon, the controller at TAG Developments Ltd. in Edmonton, quickly realized she’d have to sort out a looming cheque problem. 

TAG Developments is a full cycle real estate developer, owning and operating over 4,000 acres of land and 450,000 square feet of buildings in the Edmonton Metropolitan Region in the office, retail, industrial and residential property markets. The firm uses multiple bank accounts for its various holdings. Tenants traditionally send cheques to the head office, and Faryon, of course, would be there to collate and deposit them, as well as issue TAG cheques to suppliers. 

With everyone working home, TAG’s ability to collect and issue cheques almost ground to a halt. Faryon went into office now and then to collect and sign cheques and coordinate with another TAG manager for the second signature. But it was awkward, and felt risky given that health authorities were urging people to stay home. 

"We wanted to minimize the amount of time people would go into the office."

In May, Aaron Drever, Canadian Western Bank’s senior manager for cash management, offered a solution that has completely altered the way TAG handles accounts. He recommended the company move to collecting and remitting electronic payments using a service called Customer Automatic Funds Transfer (CAFT) and use another another service called Remote Deposit Capture (RDC), which uses a specialized scanner to deposit cheques electronically. 

The two services allow companies to replace paper cheques with electronic funds transfer while ensuring dual authorizations. The scanner, which CWB provides to clients, assists with customers, clients or tenants who still prefer to use paper cheques for payables, like monthly rent. 

With the scanner, Faryon says it allows multiple users, and the funds appear the same day, in the correct account. The CAFT was also a “life saver” and proved to be much easier for tenants. For those who still aren’t completely comfortable with electronic funds transfer, TAG set up a system that allows tenants to drop off their cheques at the management office. There, cheques are scanned, which means the property manager doesn’t have to make a trip to the bank. 

Both Faryon and TAG’s tenants appreciated the change. “We are very, very happy with the way CWB has been treating us.”   

Drever points out that these electronic payment services for businesses pre-date the pandemic, and mirror similar services available to individual customers, who can transfer funds electronically through their mobile app, as well as deposit cheques by taking a photo of them with smart phones.

Many companies, however, still use paper, he says—as many as 75%, Drever says of CWB’s commercial clients.

For several years, Drever and his team would encourage business clients to make the switch, but few did. But when the pandemic hit, interest in these kinds of electronic services saw “a huge uptick” as companies suddenly realized that basic logistical problems—like getting two signatures on the same cheque—were impeding operations. “The pandemic really pushed clients to do it very quickly.”     

When companies make this seemingly minor switch, Drever has observed, a lightbulb often comes on. Controllers and CFOs can suddenly see how much staff time was consumed by processing cheques and doing payroll manually. The electronic option "frees up time in their day to do something more efficiently."

He notes that a company issuing 70 payroll cheques per month is also incurring stationary costs, postage, staff time -- all outlays that are significantly reduced by a twice-monthly electronic funds transfer.      

Business clients, Drever adds, also become interested in exploring the many other electronic payment options available, such as collecting credit card payments by having the payment links embedded directly into web-based invoices.  

In a period when a lot of small businesses have had to scramble to stay afloat, the adoption of such electronic payment options has proven to be a silver lining.        

“We love it,” says Faryon, “and we’re going to keep using it.”